The markets remain volatile due to the economic impact of COVID-19. Historically, the construction markets remain strong. Housing starts are 1.4 percent above the March 2019 rate, and building permits increased by 5 percent YoY, according to a report from the U.S. Housing and Urban Development and Commerce Department.
Housing completions, however, are trailing—down 9 percent YoY and 6.1 percent since February.
Total housing starts are down 22.3 percent since the revised February reading, as are building permits, which experienced a 6.8 percent drop.
The Breakdown:
Housing Starts: 1.2 million (+12.2% month-over-month, +12.7% year-over-year)
Multifamily Starts: 347,000
Single-Family Starts: 856,000
Building Permits: 1.35 million (+1.1% month-over-month, +2.4% year-over-year)
Multifamily Permits: 423,000
Single-Family Permits: 884,000
Completions: 1.2 million (+12.0% month-over-month, +12.4% year-over-year)
Multifamily Completions: 357,000
Single-Family Completions: 863,000
What the Industry’s Saying:
“Housing has been deemed an essential business in most of the nation, and in the few states where the governors have not acted, we urge them to deem construction as essential. Housing can help lead an eventual rebound, as it has done in previous recessions.” – Dean Mon, Chairman, National Association of Home Builders
“We expect further declines in housing starts in April, due to the unprecedented decline in builder confidence in our latest member survey. It is worth noting that there are currently 534,000 single-family homes currently under construction and 684,000 apartments. Approximately 90 percent of these single-family units are located in states where home building is deemed as an ‘essential service,’ while 80 percent of apartments are located in such states.” – Robert Dietz, Chief Economist, National Association of Home Builders
“Housing starts fell in March, led by a particularly sharp drop in multifamily building. Construction activity declined across the country, but was particularly weak in the Northeast, which makes sense given the severe impact of the pandemic in New York. It is important to note that construction activity was running strong in the first two months of 2020, and even with March’s decline, single-family starts were 2.8 percent ahead of last year’s pace, and building overall remained 1.4 percent higher.
Similarly, permits declined for the month, but single-family remained ahead of last year’s pace, indicating that plans for building will continue, despite the sharp drop in economic activity occurring in the second quarter. Overall, March’s downshift in the pace of building aligns with this week’s MBA report on mortgage applications for new home purchases. While initial claims for unemployment insurance dropped from the previous week, an additional 5.2 million people are out of work, with almost 12 million people currently on the unemployment rolls. This sudden drop in employment is unprecedented, and highlights the need for continued household support through rental assistance programs, extended unemployment insurance benefits, and other income-related efforts to help people weather this crisis.” – Mike Fratantoni, SVP and Chief Economist, Mortgage Bankers Association
